May 2, 2014
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President Obama speaks in the White House briefing room. / Carolyn Kaster, AP

by Aamer Madhani, USA TODAY

by Aamer Madhani, USA TODAY

WASHINGTON - The use of "big data" saves lives and makes the economy run more efficiently, but new legislation is necessary to protect Americans' privacy and to make certain analytics are not used by businesses to discriminate against customers, President Obama's advisers say.

The findings come in a report released Thursday by the White House in response to a promise by President Obama to explore how advancing analytic technologies are changing society and what impact the changes are having on personal privacy.

Obama directed his aides to conduct the review in January when he announced changes to some of the National Security Agency's surveillance programs that amass large amounts of data belonging to Americans and foreigners.

Recommendations from the report, which was spearheaded by White House senior adviser John Podesta, were presented to Obama on Thursday. The working group included Commerce Secretary Penny Pritzker, Energy Secretary Ernest Moniz, White House science adviser John Holdren and economic adviser Jeff Zients. They solicited input from academic researchers, privacy advocates, regulators and the technology industry, advertisers and civil rights groups.

In recent years, government and businesses have made huge advances in collecting, storing and analyzing data quickly and relatively cheaply. Data on consumers are collected from an increasingly broad array of sources, sometimes using algorithms that give companies real-time information (think navigational apps) based on users' behaviors.

"Having looked at the power of big data, we have to be vigilant about the kinds of decisions that are being made automatically and the criteria they are being based on," Podesta said. "Big data raises serious questions, too, about how we protect our privacy and other important values in a world where data collection is increasingly ubiquitous and where analysis is conducted at speeds approaching real time."

Among the recommendations the president's advisers made:

â?˘Advance a consumer privacy bill of rights that was proposed by Obama in 2012.

â?˘Pass national legislation for how companies must report on data breaches. "Big data technologies make it possible to store significantly more data and further derive intimate insights into a person's character, habits, preferences and activities," the report says. "That makes the potential impacts of data breaches at businesses or other organizations even more serious."

â?˘Ensure educational data linked to individual students gathered in school are used for educational purposes, and protect students against their data being shared or used inappropriately.

â?˘Expand the federal government's technical expertise to combat "digital redlining." The report says the "detailed personal profiles held about many consumers, combined with automated, algorithm-driven decision-making, could lead - intentionally or inadvertently - to discriminatory outcomes."

Privacy advocates applauded the White House report's call on Congress to amend the Electronic Communications Privacy Act "to ensure the standard of protection for online, digital content is consistent with that afforded in the physical world."

"The report lays the groundwork for keeping everyone's e-mails, texts and photos private and secure. Now Congress and the administration need to make this vision a reality by enacting ECPA reform without any loopholes," said Christopher Calabrese, legislative counsel at the American Civil Liberties Union.

Some attorneys and trade groups question a need to pass new laws, and they're concerned about unintended consequences of the White House push.

"It is our view that current law works," said Mark MacCarthy, vice president of public policy at the Software and Information Industry Association, a trade group representing the software and digital content industries. "Vigilantly enforced consumer protection and anti-discrimination laws are strong and flexible enough to prevent unfair practices. Industry efforts are also safeguarding data privacy and preventing discriminatory practices. Burdensome new legal requirements would only impede data-driven innovation and hurt the ability of U.S. companies to create jobs and drive economic growth."

Paul Bond, an attorney specializing in data privacy issues with the firm Reed Smith, said that when the Home Mortgage Disclosure Act (HMDA) led to greater availability of data, plaintiffs "constantly confused correlation and causation," resulting in lawsuits that floundered under further analysis.

"The faster big data technology develops, the more care will be required to establish the actual root cause of disparate consumer outcomes," Bond said. "Those reasons can include: intentional discrimination; unintentional but nonetheless statistically significant discriminatory impact traceable to business conduct; and detectable and maybe even statistically significant evidence of different outcomes by racial or gender groups, but occurring for reasons unrelated to the conduct of the business entity defendant."

Michael Simon, who served as Obama's 2008 campaign analytics director and is the co-founder of HaystaqDNA, suggests the White House and Congress tread carefully as they consider regulating big data.

"Advancements in technology aren't going away, but are only just coming to maturity - and we need to quickly figure out how to create a regulatory environment that balances privacy concerns with encouraging innovation that can unlock the incredible potential of data analytics," Simon wrote in a blog post Thursday.